Royal Ahold and Delhaize have agreed to a merger

Two of Europe’s largest supermarket retailers, Dutch-owned Royal Ahold and Belgian Delhaize have announced the intention to combine their businesses through a merger of equals, creating a business with an annual turnover of EUR 54bn.

Both companies have a strong presence in the US and the combination, named Ahold Delhaize, will be able to serve over 50 million customers per week in the US and in Europe.

The merger will create a complementary base of more than 6,500 stores with 375,000 associates, characterized by trusted brands with strong local identities.

Ahold and Delhaize businesses reported aggregated net sales of EUR 54.1 billion in 2014. The transaction will create significant value, with anticipated run-rate synergies of EUR 500 million per year to be fully realized in the third year after completion.

In a joint statement, Jan Hommen, Chairman of Ahold, and Mats Jansson, Chairman of Delhaize, said: "This is a true merger of equals, combining two highly complementary businesses to create a world-leading food retailer. The transaction delivers a compelling value proposition for our shareholders, a superior offering for our customers and attractive opportunities for our associates."

The transaction is expected to be completed mid-2016, following regulatory clearances, associated consultation procedures and shareholder approval. The new retailer will be the fourth largest in Europe and the fifth largest in the US, according to analysts Natixis.

Mats Jansson, Chairman of Delhaize Group, will become Chairman of Ahold Delhaize, while Jan Hommen, Chairman of Royal Ahold, and Jacques de Vaucleroy, Delhaize Group Director, will become Vice Chairmen of Ahold Delhaize.

Dick Boer, Chief Executive Officer of Royal Ahold, will become Chief Executive Officer. Frans Muller, Chief Executive Officer of Delhaize Group, will become Deputy Chief Executive Officer and Chief Integration Officer.